* Signs of steadier stock markets dent safe-haven demand
* Weak Turkish gold import news pressures gold
* Eye on US bank stress test, ECB rate decision
(Recasts, updates with quotes, closing prices, adds NEW YORK
to LONDON dateline)
By Frank Tang and Jan Harvey
NEW YORK/LONDON, May 5 (Reuters) - Gold turned slightly
lower on Tuesday as weak physical demand and growing risk
appetite dented safe-haven demand in the bullion market.
Tom Pawlicki, precious metals and energy analyst at MF
Global, cited news of lower Turkish gold imports and signs of
slowing investment demand in silver exchanged-traded funds for
gold's weakness.
"It's also partly due to the stability in the stock market,
as there was not a big correction (following Monday's rally),
which is negative for gold," Pawlicki said.
Spot gold <XAU=> traded at $901.80 an ounce at 2:14 p.m.
EDT (1814 GMT), down just a hair from its late Monday quote in
New York of $902.35 an ounce.
U.S. gold futures for June delivery <GCM9> settled up $2.10
at $904.30 an ounce on the COMEX division of the New York
Mercantile Exchange.
Turkey said its gold imports declined in April to 25.698
kg, against 40 kg in March. Year-on-year, they were down 97.5
percent from 1,030 kg. []
A sharp rise in the amount of scrap jewelry entering the
market has curbed demand for gold from outside Turkey.
EYE ON US BANK STRESS TEST
Gold could benefit later this week from the results of
stress tests on U.S. banks, which are expected to be released
on Thursday. Several of the largest U.S. banks could be
instructed by regulators to raise more capital.
[]
Also bullish for gold are expectations that the European
Central Bank will cut its main policy rate to a record low on
Thursday.
"This week's ECB meeting ... will obviously have an impact
on the dollar/euro rate, and could therefore have an impact on
gold," said Calyon analyst Robin Bhar.
"There is a lot of uncertainty out there at the moment --
there are the bank stress tests as well."
Gold prices slipped from highs as the dollar recovered from
a one-month low against the euro. Gold is often bought as an
alternative to the U.S. currency and usually moves in the
opposite direction to it. []
Investment in the precious metal through gold-backed
exchange-traded funds remains relatively lackluster. Holdings
of the largest gold ETF, SPDR Gold Shares <GLD>, were unchanged
on Monday for the seventh consecutive session.
MF Global's Pawlicki said that gold's recent strength was
supported by fund buying rather than fresh interest, and that
could not be sustainable on a long-term basis.
RUSSIA OUTPUT RISES
On the supply side, Russia's main industry lobby said the
country's gold output rose 42 percent in the first quarter to
31.39 tonnes. Russia was the world's fifth largest gold miner
last year, producing 188.7 tonnes, metals consultancy GFMS
said. []
Meanwhile, spot silver <XAG=> reached a near six-week high
of $13.59 and was last at $13.34 an ounce, up 2.5 percent from
its previous finish of $13.01.
Among other precious metals, platinum <XPT=> was at
$1,127.50 an ounce, up 0.9 percent from its late Monday quote
of $1,117, while palladium <XPD=> was at $219.00 an ounce, up
0.5 percent from its previous finish of $218.
(Reporting by Frank Tang and Jan Harvey; Editing by Lisa
Shumaker)
